Supertowne (a fictitious organization) is a nationwide superstore. The board of directors and leadership has decided to expand Supertowne, opening stores in both Canada and Mexico. Their long-range plans include expansion into many other countries. You are charged with the development of a store in Canada.
You have several team members from both the U.S. and Canada working with you. For the most part, your team works together with very little conflict. However, one of your U.S.-based employees, Matt, has been arguing with Mary, a Canada-based employee. Mary expects Matt to provide certain officials with gifts (along the lines of expensive liquor or cigars). Mary has explained that this is common practice when doing business in Canada.
Their arguments have escalated, and recently grew into a shouting match during which Matt accused Mary of expecting Supertowne to participate in bribing officials. Mary denied the accusation. Both are now refusing to work together. Their conflict is impacting your entire team and causing team members to take sides.
Flo Choi owns a small business and manages its accounting. Her company just finished a year in which a large number of borrowed funds were invested in a new building addition, as well as in equipment and fixture additions. Choi’s banker requires her to submit semiannual financial statements so he can monitor the financial health of her business. He has warned her that as profit margins erode, this might raise the interest rate on borrowed funds to reflect the increased loan risk from the bank’s point of view. Choi knows that profit margins are likely to decline this year. As she prepares year-end adjusting entries, she decides to apply the following depreciation rule: all asset additions are considered to be in use on the first day of the month following the purchase date. (The previous rules assume that assets are in use on the first day of the month nearest to the purchase dates.)
In your response, address the following:
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